Russian Ruble Hits 17-Month Low Against Dollar Amidst Economic Pressures From Ukraine War

Key Takeaways:

• The ruble slumped past the 100 mark against the US dollar
• This is a near 17-month low for the struggling ruble
• The Kremlin has blamed the Central Bank for the fall

YEREVAN (CoinChapter.com) —The Russian ruble has plunged past the critical threshold of 100 per US dollar. The dramatic fall amidst the Kremlin’s invasion of Ukraine marks a nearly 17-month low for the national currency. 

The Ruble’s decline has now triggered internal debates over the nation’s monetary policy. Much as Moscow would like to deny it, the erosion of income streams due to international sanctions is becoming evident.  

The Ruble tanks: Kremlin points fingers at the Central Bank

On August 14, the ruble traded at over 101 per US dollar, breaching this symbolic benchmark for the first time since March of 2022 when it plummeted to around 120 against the greenback. 

This slide is indicative of an escalating downward trajectory witnessed in recent weeks. While it is a considerable distance from last year, it is noteworthy that the Russian currency’s value is now almost half of what it was in June 2022. 

Since Russian President Vladimir Putin deployed troops into Ukraine in February 2022, the ruble has experienced a depreciation of approximately 25% against the dollar.

The current decline translates to a loss of approximately 27% in its value. When the current year opened in January, the Russian currency maintained a value of approximately 73.7500 rubles per dollar.

Before the invasion of Ukraine, the ruble was worth around 76 rubles per dollar. The recent decline places it next to other poor-performing currencies, like the Turkish lira, the South Korean won, and the Argentine peso, according to reports. 

The country’s central bank attributed the ruble’s decline to Russia’s reduced current account surplus, which experienced an 85% year-on-year decrease in the period from January to July.

However, the official Kremlin has instead blamed the Central Bank for the fall. President Vladimir Putin’s economic adviser, Maxim Oreshkin, wants the Central Bank Governor Elvira Nabiullina to act. According to the Russian authorities, the Central Bank has pursued a rather soft monetary policy. 

“The main source of ruble weakening and accelerating inflation is soft monetary policy. The central bank has all the tools to normalize the situation in the near future,”  

Oreshkin wrote in an op-ed for the TASS news agency, as cited by Reuters. 

Meanwhile, the nation’s apex bank will hold an extraordinary meeting on August 15 to discuss the level of its key interest rate. Its current interest rate stands at 8.5%, but that may change.